The Time Is Absolutely Here To Get Real About Renting

To some, what the council is doing
around housing may lack the sexiness of a snappy title
(Let’s Get Wellington …Housed?), billions of dollars
pegged to delivery or the high drama of the battle for
Shelly Bay, but I am certainly proud of the inroads that we
as a council have made into housing this triennium.

I took
over the Housing Portfolio in 2017, and in the two years
since then, we have made some serious progress in a number
of areas, working collaboratively as a council and with
officers.

We are well down the line on upgrading our
social housing stock – a task made much harder by the 2016
earthquake and the inherited challenges around City Housing.
We chose to partner with Housing New Zealand around the
Arlington sites, and as a result, we have made it not only
possible, but inevitable, that the overall number of social
housing units in Wellington will substantially grow over the
next few years, including at least two newly redeveloped
sites of our own.

The 2018-19 year saw a record number of
building consents issued and a steady growth in the uptake
of our $5000 rates rebate for new home builds.

We launched
the Planning for Growth process, which means the beginnings
of a much-needed District Plan review, with the ultimate
goal of leading to the new settings and rules needed to,
bluntly, build more houses.

This year, we also made the
decision to cover the development contributions on Dwell
Housing Trust’s new Kilbirnie site. This signals, I hope,
a new policy that will encourage and assist Community
Housing Providers to play they vital part in increasing
supply.

However, it is our Apartment Conversion scheme
that has just begun to address the most urgent crisis in
Wellington housing - renting . A study done at the end of
last year, by economist and rental expert Shamubeel Eaqub,
definitively shows the rapid rise in Wellington rents
alongside a corresponding flattening in supply of rentals.
Put simply, this means people want to rent in the capital,
and there simply aren’t enough rentals - and looking
forward, there won’t be enough rentals, unless we make a
serious intervention in the rental market.

One of the key
points of Shamubeel’s paper is the distinction it makes
between the rental market and the housing (to buy) market.
The nuance here is important: to put it quite plainly,
simply building more houses all around Wellington and
assuming that that selling them to buyers won’t have a
significant impact on the rental market. Instead, our
intervention needs to be precise and intentional with the
goal of providing more rentals.

We have begun doing
exactly that through our apartment conversion scheme. I am
proud that we have started something that no other council
in New Zealand has attempted before. The scheme had
unanimous support around the council table and that shows a
level of courage and determination to meet renting as an
issue head on.

At the same time, getting the scheme going
has been a slow and frustrating process, despite the concept
being relatively simple: a private developer has an existing
office building which they convert into good quality, warm,
safe, dry apartments, after which council takes the risk out
of this process by taking a long-term head lease out on the
entire building – thereby guaranteeing an ongoing revenue
stream – and covers its costs by renting the apartments
out.

The challenge comes in getting the numbers right so
that the developer makes some profit (which is after all the
incentive for the developer to take part in the scheme),
council / ratepayers break even and tenants pay a fair rent.

Getting this formula right has taken a lot of effort and
goodwill and I was very happy to hear Alex Cassels confirm
at last Wednesday’s renters’ forum that the methods and
formulae he and his father have developed around the concept
will be made freely available to others who are interested
in getting involved, including his competitors.

The upshot
of all this is that from around April next year new
apartments will begin to come into the Wellington market,
managed by council, at rents that are set based on covering
costs and knowing what the target group can afford, rather
than just the open get-as-much-as-you-can market. That’s
called making a difference and intervening in the one part
of the Wellington housing scene that needs it the most.

But we can do more. That’s what Getting Real about
Renting was about. I wanted to host this forum about a year
ago but I needed the right people in the room. We needed to
hear from those most impacted by the current rental crisis
and those with some ideas about how to address that crisis
in the real world. I needed that because I don’t have all
the answers. Council doesn’t have all the answers. No one
person, group or organisation has all the answers. That much
I’m certain of.

There is more that council can do,
but it’s going to take the will to do it and the
acknowledgement that renting is its own conversation with
its own challenges and needs to be approached specifically
and as a combined effort with everyone in the room.

Clr Brian DawsonWCC Housing Portfolio
Leader

Brian Dawson is running for Wellington City
Council for the Lambton Ward, on the Labour Ticket. On
Wednesday September 4th he convened ‘Getting Real About
Renting’- a public meeting to discuss the Wellington
rental situation attended by approx. 100
people.

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